Ministry of Defence
Strengthening the Defence Manufacturing Sector
DRDO has taken the following measures for strengthening the industry to reduce the timelines from development to induction:-
- Accessibility of DRDO Test Facilities to Indian Industry.
- Identification of Development-cum-Production Partner/ Production Agency/ Lead System Integrator  for early integration of industry.
- Technology Development Fund  has been implemented to provide support for design and development of technologies/ prototypes, indigenisation of imported systems/ components and new systems especially by MSMEs/ Start-ups.
- Simpler Transfer of Technology  Policy to encourage industries
- Free access of DRDO patents to industries
- Identified 108 exclusive systems for development by industry which will not be taken by DRDO
- DRDO is focused to carry out R&D work on critical & advanced technologies that industries cannot do.
Measures proposed to be taken for strengthening the Ordnance Factories and DPSUs to meet countries defence requirements are as follows:-
- To carve out a future growth path, a visioning exercise and study has been commissioned for DPSUs for restructuring and reforming them to become cost competitive and efficient.
- DPSUs have been encouraged to work as aggregators and maximize outsourcing from indigenous sources. Over the last 2 years, the vendor base of DPSUs/OFB has increased substantially from 8000 to 12878 as on 30.06.2021.
- Disinvestment of DPSUs is being pursued.
- Focus on modernization of production facilities through higher CAPEX. Further, following roadmap is being implemented by the OFB/DPSUs for technology modernization:
- Investing in Industry 4.0 technologies in areas of Manufacturing, Supply Chain & other broader digital transformation initiatives.
- Focusing on emerging areas of Artificial Intelligence, Data Fusion, Web Technologies, Data Analytics, 3D Printing, Networking and Cyber Security. These technologies are now being incorporated into Products and Systems at the design stage itself.
- Change in the traditional ToT based manufacturing approach to a more proactive Co-development and Co-Production approach.
- Increased software based testing for reducing the time and efforts that go in testing of products.
- Promoting IP culture in DPSUs through Mission Raksha Gyan Shakti. So far, 32,799 officers and staff of DPSUs/ OFB/DGQA have been trained in IPRs and 2,417 IPs have been filed and 981 IPs have been granted/registered.
- For 2021-22, the allocation for Domestic procurement has been enhanced compared to previous years and is planned to be about 64.09 % i.e. Rs. 71,438.36 Crore of the allocated amount for military modernization.
- Ministry of Defence has notified two ‘Positive Lists’ for Indigenisation comprising of 209 items on 28.08.2020 and 31.05.2021 respectively, for which there would be an embargo on the import beyond the timeline indicated against them.
- An indigenization portal namely SRIJAN has been launched in August 2020 for DPSUs/OFB/Services with an industry interface to provide development support to MSMEs/Startups/Industry for import substitution. So far, more than 10,945 Defence items, which were earlier imported, have been displayed on the portal. Private industry has expressed interest in indigenising more than 2400 items.
- To enhance functional autonomy, efficiency and unleash new growth potential and innovation in Ordnance Factories, the Cabinet Committee on Security  in its meeting held on 29.07.2020 had approved to convert Ordnance Factory Board , a subordinate office of Ministry of Defence, into one or more than one 100% Government owned corporate entities, registered under the Companies Act, 2013. The Cabinet in its meeting held on 16.06.2021, has now, inter-alia, approved to convert the production units of OFB into 07 DPSUs with 41 units.
- The Government has enhanced FDI in Defence Sector up to 74% through the Automatic Route for companies seeking new defence industrial license and up to 100% by Government Route. The obligatory government approval for existing FDI approval holders / current defence licensees for change in equity /shareholding pattern up to 49% FDI has been replaced with mandatory declaration for the same within 30 days of change of equity / shareholding pattern. These reforms are likely to attract foreign investment in Defence & Aerospace sector.
- Reforms in Offset policy have been included in DAP 2020, higher multipliers have been assigned for Transfer of Technology  to DPSUs/OFB.
- In order to promote indigenous design and development of defence equipment ‘Buy {Indian-IDDM }’ category has been accorded top most priority for procurement of capital equipment.
- Department of Defence Production has notified 46 items under the latest Public Procurement Order 2017 notified by Department for Promotion of Industry and Internal Trade , for which there is sufficient local capacity and competition and procurement of these items shall be done from local suppliers only irrespective of the purchase value.
Services are the primary stakeholders in DRDO projects. They are involved right from the conceptualization of the project through peer reviews, design reviews i.e. Annual Joint reviews, Joint reviews & bi-annual reviews and a three tier project monitoring mechanism as per DRDO procedure for all Mission Mode  projects undertaken by DRDO.
Also, a number of Collegiate interaction meetings between DRDO and Users are being held for specific requirements/ issues as and when required.
Moreover, DRDO, OFB, DPSUs and Armed Forces being part of the same Ministry regularly interact with each other for the design development and production of Defence equipment as per the requirements of Defence Forces.
This information was given by Raksha Rajya Mantri Shri Ajay Bhatt in a written reply to Dr Banda Prakash in Rajya Sabha today.